The three most important challenges for HR leaders are to help build an organisation that is adaptable, to create an environment that inspires extraordinary contribution from its people and to help make innovation a systemic capability, according to leading management guru Gary Hamel.
Organisations are being challenged by change like never before, and Hamel said the question they need to ask themselves is: “How do we build an organisation that can change as fast as change itself?”
Meeting this paramount challenge of building organisations that can change as fast as change itself will add an evolutionary advantage over time, and he said doing this presents two scenarios for organisations.
“First, if you want to build a company that is adaptable at its core, then it changes before it has to. Second, the company also has to be deeply innovative and constantly trying new things and experimenting,” said Hamel, a visiting professor of strategic management at London Business School who has been ranked by The Wall Street Journal as the world’s most influential business thinker.
“For example, let’s just say that the average strategy lifecycle is 10 years today (and I think that’s being generous). Change is happening faster than that. Look at how dramatically things changed in the mobile phone industry for Nokia then Blackberry and Apple – and now who knows where next?
“The moment you choose to take up the challenge of building an adaptable company, you need to build an innovative company”
“If you believe that every 10 years there’s going to be a fundamental change in underlying business models then that means year by year by year, you have to be shifting by at least 10 per cent – in what you’re doing, how you price, the way you go to market, and how you reach customers.
“So this change should be perhaps fundamentally different from the way it was a year before.”
The moment you choose to take up the challenge of building evolutionary advantage, Hamel said you need an organisation where innovation is happening all the time and everywhere.
“It’s not a pocket, it’s not in a particular function – it’s a whole-of-organisation approach in which every function and part of a business is experimenting all the time, because the pace at which any institution or strategy can evolve is a matter of the pace of experimentation,” he said.
“The moment you choose to take up the challenge of building an adaptable company, you need to build an innovative company. Innovation doesn’t happen despite the system, it happens because of the system – and this in turn takes you to a question of where innovation comes from.”
The three ingredients of innovation are initiative, creativity and passion, and Hamel said that if organisations want to innovate they have to create a work environment in which people are willing every day to bring the gifts of their initiative, creativity and passion.
“These human capabilities are not things you can command. They are things that people either freely bring to work, or not, and we know they don’t for the most part,” he said.
For the full interview with Hamel and steps companies can take to transform their organisation, see the next issue of Inside HR magazine.